With HDFC Bank posting its highest ever quarterly net profit for the three months to September 2017, the bank has outdone Infosys for the fourth consecutive quarter in terms of net profit.
With HDFC Bank posting its highest ever quarterly net profit for the three months to September 2017, the bank has outdone Infosys for the fourth consecutive quarter in terms of net profit. The most valued lender by market capitalization, which was recently added to the central bank’s list of lenders it considers “too big to fail”, reported 20% growth in Q2 net profit to Rs 4,151 crore, whereas the IT major Infosys posted a net profit of Rs 3,726 crore during the quarter, up 7% on q-o-q basis. Interestingly, HDFC Bank’s profit was higher than that of Infosys’s only eight times in the past 81 quarters, that is, starting from first quarter of FY98.
Apart from first and second quarters of fiscal 1998, the bank had briefly overtaken Infosys in Q3FY16 and Q1FY17 as well. As of September 2017, Infosys employs over 1.98 lakh people, the second largest by any private Indian firm after Tata Consultancy Services. HDFC Bank has an employee strength of 84,325 as at the end of FY17. Along with global factors such as the uncertainty about US visas for Indian workers, delay in decision on outsourcing contracts, internal boardroom tussles have also weighed on the IT company’s performance. Despite posting better-than-expected profit for the quarter, the second largest IT exporter has cut its revenue forecast in dollar terms to 6.5%-7.5% for the full year FY18 from 7.1%-9.1%, that it had estimated earlier. “During the quarter, we responded quickly to the management and Board changes through proactive communication with all stakeholders minimizing any negative impact to the business and allowing us to deliver growth across all our large industry units.” said UB Pravin Rao, Interim CEO and managing director of Infosys.
According to a recent Morgan Stanley report, HDFC Bank is one of the top 20 stocks owned by foreign portfolio investors (FPIs), while Infosys saw most selling among blue chip stocks. Of the 51 analysts who track HDFC Bank’s stock on Bloomberg, 88.2% have a buy rating on the stock, whereas only 53.1% of analysts suggest a buy for Infosys. The recent underperformance of software stocks, once considered a bellwether of the overall market, has made the IT Index the second-worst performer among the BSE sectoral indices so far in 2017. The BSE IT index gained 1.9% so far this year, against 22.5% gain clocked by the benchmark Sensex..